Hotel service provider in Freising facing bankruptcy: minimum wage as a trigger!

Hotel service provider in Freising facing bankruptcy: minimum wage as a trigger!

The Bavarian hotel industry is facing significant challenges, which are exacerbated by rising wages and a tense economic situation. A current example from Freising illustrates the problem: The BMC Hotelservice & Service GmbH has filed for bankruptcy at the Landshut district court. The reasons are complex, but rising wage costs, especially in connection with the minimum wage of currently 12.82 euros per hour, play a decisive role. The company employs around 50 people and specializes in cleaning and service in the hotel industry.

It looks like BMC, with over 30 years of industry experience, has plenty of business, but the economic reality remains harsh. Lawyer Marc-André Kuhne, who was appointed provisional insolvency administrator, emphasizes that BMC is by no means an isolated case. Many companies in the industry suffer from similar problems. Long-term contracts with clients make quick price adjustments more difficult and lead to liquidity bottlenecks that are becoming increasingly severe.

The impact of the minimum wage on the industry

BMC is not the only company having to deal with the consequences of the increased minimum wage. Bavarian tourism as a whole employs over 360,000 people, with more than half working in low-wage sectors. With the next gradual increase in the minimum wage to 13.90 euros from January 2024 and 14.60 euros in 2027, many companies expect high additional costs that cannot always be easily passed on to guests.

Theresa Albrecht, manager of the Hotel zur Post in Rohrdorf, expresses concerns about exploding wage costs. “We can’t simply raise prices, and many hotels are therefore on the verge of going out of business,” she warns. Your voice is shared by many in the industry, because the high taxes and especially the 19% VAT on food are proving to be an additional burden for the catering industry. In comparison, in Austria only 10% applies, which is perceived as unequal competition.

Action and reaction in politics

In view of these challenges, Federal Labor Minister Hubertus Heil is even calling for a minimum wage of 15 euros, which is met with resistance from many restaurateurs. Business associations and DEHOGA, the catering association, are warning of further economic difficulties, while the trade unions, represented by the German Trade Union Confederation (DGB), support the increase as a necessary step for employees in the hospitality industry.

The situation is complex: There are numerous temporary workers, mini-jobbers and people with disabilities in the industry, all of whom are affected by the wage increases. A rising minimum wage increase could also trigger discussion about the salaries of well-paid skilled workers, further complicating the issue. Entrepreneurs like Natalie Mammel from Tübingen, who are faced with good business operations in their restaurant, also point out that rising costs and possible new distortions of competition represent an acute threat.

At this critical time, when ongoing discussions are taking place between hotel operators, clients and investors to stabilize operations, it remains to be seen how the situation will develop. One thing is certain: hotels and service providers are at a crossroads where they have to find the balance between fair income and economic viability.